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FOREX

Slight Recovery In Risk Sentiment Pressures Yen

US TSYS

Cheapening Impetus Kicks Back In

CNH

Marginally Firmer

JGBS AUCTION

Japanese MOF sells Y2.1215tn 10-Year JGBs:

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The discovery of a heavily mutated variant of Covid-19 in South Africa inspired a rush into safe haven currencies. Scientists are still working to shed some light on the likely consequences, but there is concern that the new variant could dodge immunity and a leading South African researcher called it "clearly very different" from previous strains.

  • The JPY caught a bid and comfortably outperformed its G10 peers, closely followed by its safe haven peer CHF. USD/JPY retreated below the Y115.00 figure, while the Japanese government assured that no cases of the new variant have been found in Japan.
  • High-beta currencies went offered as Covid jitters resurfaced. AUD/USD plunged through support from Sep 29 low of $0.7170 and printed its worst levels in three months, as the AUD lagged all of its G10 peers. Across the Tasman, the NZD faltered for the sixth day in a row.
  • EM FX space drew attention in light of idiosyncratic developments. USD/ZAR surged to its highest point in a year, as the spread of the new variant inspired speculation that South Africa could be hit by another deadly wave of infections.
  • Separately, USD/MXN extended gains and showed at a one-year low, after Pres Obrador tapped a little-known Finance Ministry official with no experience in monetary policy to be the next Banxico chief.
  • Thursday's Thanksgiving holiday may have limited liquidity across the broader FX space.
  • The data economic docket is rather thin today, while central bank speaker slate features ECB's Lagarde, de Guindos, Lane, Visco, Schnabel, Centeno & Panetta, BoE's Pill & Riksbank's Ohlsson.